Paytm Stock Soars Nearly 5% As Bernstein Raises Target Above IPO Price For First Time

One 97 Communications Ltd. shares of Paytm parent One 97 Communications Ltd. jumped almost 5 percent Monday after the global brokerage Bernstein raised its target price of Paytm to Rs 2,200. The new target is the first time the brokerage has set a price target above Paytm’s IPO issue price of Rs 2,150.

Paytm shares climbed 4.5% to Rs 1,506.60 in the morning session compared to the broader market. But it had to give back some of the gains and was 4.12% higher at Rs 1,501 at 10:02 a.m. IST while the Nifty was down 0.09%.

Bernstein’s revised target reflects the brokerage’s expectations around the Centre’s recently introduced framework for Merchant Discount Rate (MDR) on select UPI transactions.

Bernstein Raises Paytm target price to Rs 2,200

Bernstein has included the potential impact of MDR in its FY28 estimates and raised its target price on Paytm to Rs 2,200.

The brokerage expects the introduction of MDR on eligible UPI merchant transactions to improve Paytm’s payments economics. According to Bernstein, MDR could increase net payment margins by 3-4 basis points, which could result in a 30% increase in its FY30 estimated earnings per share compared with its earlier forecasts.

The revised target is important because Paytm’s IPO was priced at Rs 2,150 per share. But the company made its stock-market debut at a substantial discount in November 2021.

Paytm opened at Rs 1,950 on NSE and Rs 1,955 on the BSE on November 18, 2021, below its issue price.

Paytm Share Price Performance

Paytm shares have had a successful recovery in the past year. More than a 15% gain in 2026 and more than 41% higher in the last 12 months.

The company’s biggest single-day intraday increase on February 7, 2023, was 20%.

The recent rally represents good investor sentiment for the company as the company is posting better profits and the core payments business is likely to benefit from changes in the UPI ecosystem.

Centre Paves Way For MDR On UPI Transactions

The Centre has paved the way for introducing Merchant Discount Rate (MDR) on a limited set of UPI merchant transactions above a certain threshold.

The change follows the passage of the Taxation and Other Laws Amendment Bill, 2026, in Lok Sabha. It removes the legal restriction on MDR on some electronic payment transactions.

For payment companies like Paytm, the possible introduction of MDR could provide an additional revenue stream and improve the economics of selected merchant transactions.

However, the impact will also depend on the final implementation, transaction category eligibility, and the MDR rates introduced.

Paytm Reports Fifth Consecutive Profitable Quarter

The most recent earnings have also raised the investment case for Paytm.

One97 Communications reported a consolidated revenue of Rs 2,448 crore in fiscal 2026-27 (up 8.1% sequentially from Rs 2,264 crore in the previous quarter).

The company’s consolidated net profit rose 20% quarter-on-quarter to Rs 220 crore from Rs 184 crore, and this was driven in part by the company’s investment in its information technology and data analytics division.

Operating profits grew at a much faster rate. Earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 54 per cent to Rs 203 crore from Rs 132 crore in the previous quarter.

Paytm has also seen an increase in EBITDA margin to 8.3% from 5.8% a year ago.

The company said it was the company’s fifth consecutive profitable quarter, and that it was a significant improvement from the first quarter after its stock market debut.

Paytm Stock Outlook

The combination of revenue growth, better profitability, higher operating margins and the possible introduction of MDR on eligible UPI transactions has provided some new optimism about Paytm's earnings prospects.

Bernstein’s Rs 2,200 target price is a major change in valuation view, especially because it is now above the company’s original IPO price of Rs 2,150.

But investors should note that brokerage target prices are estimates and can change depending on earnings, regulatory developments, market valuations and the pace of growth in Paytm’s businesses.

The implementation of MDR will also be important to monitor. Any changes to the scope, rates or timing of MDR could affect the potential earnings benefit for payment platforms.

For now, the combination of five consecutive profitable quarters and the possibility of better payments monetisation has given Paytm investors a fresh catalyst to watch.